Wednesday, May 30, 2007

American men in their 30s today are worse off than their fathers' generation, a reversal from a decade ago, when sons generally were better off than their fathers, a new study finds.

The study also says the typical American family's income has lagged far behind productivity growth since 2000, a departure from most of the post-World War II period.

The findings suggest "the up escalator that has historically ensured that each generation would do better than the last may not be working very well," says the study, released Friday.

Family incomes of 30-something men have continued to rise in recent decades, but mostly because more of their wives are working, the study's authors said. Yet even with the addition of women's paychecks, the rate of family-income growth has slowed.

Along with data showing more workers are earning less in comparison with the incomes of top earners, the report suggests a growing number of Americans "believe that the rules of the game are no longer fair," said John Morton, director of the Economic Mobility Project at the Pew Charitable Trusts and one of the study's lead authors.

Median income down

In 2004, the median income for a man in his 30s was $35,010, the study says, 12 percent less than for men in their 30s in 1974 — their fathers' generation — adjusted for inflation. In 1994, median income for men in their 30s was $32,901, 5 percent higher than 30 years earlier.

The median is the midpoint: half of men earn more, half earn less.

Researchers focused on that age group because income in one's 30s is a good predictor of lifetime income, according to the report.advertising

Outsourcing and the demise of higher-paying manufacturing jobs have contributed to the stagnation in men's incomes, Morton said. The influx of well-educated women into the work force since the 1970s also might have exerted downward pressure on men's wages, he said.

Freelance television editor Chapen Hayslett, 31, of Los Angeles, said he earns between $48,000 and $50,000 when he works steadily, a figure he says is probably less than his father made at the same age as an Air Force officer.

Hayslett said the $80,000 in student loans he accumulated earning his film degree at the University of Southern California might have limited his earning potential, at least in the short run. "I didn't have the ability to take as many risks in taking jobs or being more decisive," he said. "It was ... oh my God, I need a job."

Across political spectrum

The Pew report is the first in a planned series of studies on economic mobility drawing together researchers representing think tanks from across the political spectrum, including the American Enterprise Institute and Heritage Foundation on the right and the Brookings Institution and Urban Institute on the left.

The generational income gap highlights troubling questions, Morton said, including what happens if an increasing percentage of Americans believe the American dream "is off-limits to them."

The report also found that between 1947 and 1974, productivity, or output per hour, and median family income, adjusted for inflation, roughly doubled. Between 1974 and 2000, however, productivity rose 56 percent while income rose 29 percent. Between 2000 and 2005, productivity rose 16 percent while median income fell 2 percent, challenging "the notion that a rising tide will lift all boats," the report says.

Isabel Sawhill, of the Brookings Institution, another lead author of the report, said several factors could explain the divergence: a growing share of income going to the highest-paid workers, or to profits; an increased share of labor compensation going toward benefits such as health care; or a decline in the number of wage earners, or hours worked, in the typical family.

Bill Beach, of the Heritage Foundation, said increased immigration could have pulled down median wages, since most immigrants at first earn less than native-born workers. But he said their incomes may also move up more rapidly in subsequent years.

Careerist baby boomers

Diehard careerist baby boomers also might partly explain the inability of 30-something men to move up the income ladder as quickly as their fathers. From the moment Generation Xers entered the workplace, boomers have been the "ceiling" blocking their way up the income ladder, said Peter Rose, a partner with marketing-research company Yankelovich in Los Angeles.

"The boomers stand out in defining themselves in terms of their work and have shown a disinclination to get out of the way," he said.

Freelancer Hayslett said he thinks there's another factor: "Honestly, it seems that women are more together," he said. They're more stable and focused, he said, compared with "a lot of guys who feel so frustrated that they tend to move around and leave."